It's only a $20 drop, but the timing is significant. Sony will now sell the PlayStation 2 for $130, a move that had been widely predicted by analysts recently.

No question the PS2 has been a smashing success -- with 101 million units shipped worldwide to date. The price cut is designed to gin up a few more sales before everyone starts talking about Sony's next-generation console, the PlayStation 3. It may also have something to do with the fact that more Xbox 360s are available now that Microsoft has its production facilities up to speed.

Sony is going to announce more details about the PS3 next month at the Electronic Entertainment Expo in Los Angeles. We'll be there covering it all.